Commission sets date to decide on power-rate bid

As the first in a series of hearings on NV Energy’s big rate case wrapped up Wednesday, the state’s Public Utilities Commission set a date for a decision on the utility’s rate-increase request.

Rick Hackman, a spokesman for the commission, said the agency’s commissioners would decide the case at a special-agenda meeting at 9:30 a.m. on June 24.

The meeting is open to the public, and is scheduled to happen inside the commission’s offices at 101 Convention Center Drive, Suite 250.

That’s the same place where evidentiary hearings in the case began Tuesday. The first of three planned sessions dealt with the amount of money it costs NV Energy to borrow for acquiring and buying power sources.

The cost-of-capital hearings were scheduled to continue through Friday, but all sides had finished presenting their positions by late Wednesday afternoon.

The evidentiary hearings let NV Energy provide, well, evidence to justify the rate increases it seeks. They also give the state’s Bureau of Consumer Protection and corporations the opportunity to argue for different — usually smaller — increases. Among the eight volumes and 2,000 pages of supporting documents NV Energy submitted with its rate application, readers will find financial reports, tabulations of working capital, details on how the company measures depreciation of its assets and even business-expense reports.

The second round of hearings is scheduled for May 4-8, and will address NV Energy’s revenue requirements. It’s at that round of hearings where debate can get interesting, Hackman said. The commission’s staff will recommend whether to allow certain expenses NV Energy wants to recoup. It was during the 2003 revenue-requirement phase that the commission decided to void $500 million in rate increases the utility sought to cover price spikes amid the Western energy crisis of 2000 and 2001.

With both commission staff members and consumer advocates “making an issue of utility salaries and bonuses,” discussion about revenue requirements could prove intriguing, Hackman said.

The final session is scheduled for May 11-15, when all parties make the case for rate designs, or who pays how much. And that’s where interveners, or big companies and agencies looking to affect the increase, typically jump into the game.

NV Energy has suggested 32 different rates for power uses, ranging from apartments and large single-family homes to street lights and water-pumping stations. The overall rate gain would be 13.6 percent, though single-family homes would see a boost of 16.7 percent, or $24 a month on the average bill.

NV Energy will ask the Public Utilities Commission to freeze rates at current levels for locals earning less than 150 percent of the federal poverty level, which now stands at $10,830 for a single-person household and $22,050 for a family of four. The utility will also ask the commission to delay the start of the higher rates from July 1 to Sept. 1.

Eight entities have intervener status in the case. The U.S. Department of Energy and the Southern Nevada Water Authority are interveners, as is a power provider called Nevada Cogeneration Associates Nos. 1 and 2. Wal-Mart, the Southern Nevada Hotel Group, the Colorado River Commission and the Board of Regents of the Nevada System of Higher Education are all scheduled to intervene in the case. Kroger Co., which owns Smith’s Food and Drug, also filed as an intervener.

Individual consumers can’t intervene because they’re represented by staffers at the Public Utilities Commission, as well as the state’s Bureau of Consumer Protection, Hackman said.

Interveners don’t necessarily testify with their own evidence, but they do enjoy a seat at the table, which means they can submit written questions and cross-examine witnesses. Most interveners enter rate cases to protect their interests in the rate-design discussion, Hackman said. They generally focus on providing reasons as to why their rate increase should be minimal.

After the hearings conclude, presiding Commissioner Sam Thompson will write a draft decision, which the commission will post on its Web site at http://pucweb1.state.nv.us/pucn/.

All evidentiary hearings are open to the public, though members of the public can’t comment on the proceedings. The hearings take place at the commission’s local offices. The commission held public hearings on April 6 at the Las Vegas Convention Center.

NV Energy filed its general rate case Dec. 1. Company officials say they need to recover some of the costs of moving toward energy independence for the state of Nevada. NV Energy has spent $1.5 billion buying and building power plants in the state so it doesn’t have to rely on outside power providers and expensive wholesale markets.

State law requires NV Energy to file a general rate case every three years. The last case happened in 2006.

To see NV Energy’s rate-case application and its accompanying details, visit www.nvenergy.com/company/rates/filings.

Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512.

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